The largest satellite TV provider in the U.S.,
) is set to release its first-quarter 2013 results before the
opening bell on May 7, 2013.
In the last quarter, the company delivered a 33.62% positive
earnings surprise. Let's see how things are shaping up for this
Factors to be Considered this Quarter
We believe that a maturing Pay-TV market in the U.S. coupled
with tough competition from cable MSO's (multi service operator)
remain the biggest challenge for DIRECTV. Apart from the MSO's,
the large telecom carriers are also reducing its market share by
offering fibre-based TV and other high-speed broadband services.
Additionally, DIRECTV is significantly lagging in providing
services like streaming facilities and has been losing market
share to mainstream pay-TV service providers.
However, the company has taken some strategic steps to
streamline its cost structure through better negotiation with the
content providers and focusing more on becoming a premium brand
in the U.S., targeting the high-end customers. These steps are
expected to bring some respite for DIRECTV in the coming
Our proven model does not conclusively show that DIRECTV is
likely to beat the Zacks Consensus Estimate this quarter. That is
because a stock needs to have both a positive Expected Surprise
Prediction (ESP) (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank #1 (Strong Buy) or #2 (Buy) or #3 (Hold) for
this to happen. Unfortunately, this is not the case here as
This is because the Most Accurate estimate is $1.05 but the Zacks
Consensus Estimate stands at $1.06. This leads to an ESP of
-0.94% for DIRECTV.
Zacks Rank #3 (Hold):
However, DIRECTV's Zacks Rank #3 increases the predictive power
We caution investors against the stock going into the earnings
announcement, as a Zacks earnings ESP of -0.94% combined with a
Zacks Rank #3 lowers the possibility of an earnings surprise.
Other Stocks to Consider
Here are some other companies to consider as our model shows
they have the right combination of elements to post an earnings
beat this quarter:
Research in Motion Limited
) has Earnings ESP of +200.00% and carries a Zacks Rank #2
) has an Earnings ESP of +3.77% and carries a Zacks Rank #3
Dish Networks Corp.
) has an Earnings ESP of +1.89% and carries a Zacks Rank #3
RESEARCH IN MOT (BBRY): Free Stock Analysis
DISH NETWORK CP (DISH): Free Stock Analysis
DIRECTV (DTV): Free Stock Analysis Report
TELUS CORP (TU): Free Stock Analysis Report
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